(Yicai Global) Oct. 16 -- OneThing Technology Co., a subsidiary of China-based multinational internet company Xunlei Ltd. [NASDAQ:XNET], refutes claims that its new blockchain-based product OneCoin constitutes a new version of banned initial coin offering (ICO) activities, stating that it cannot be purchased or traded in cash, China news outlet ThePaper reported.
The OneCoin digital asset is based on OneCloud intelligent hardware, and relies on shared economy cloud computing and blockchain technology, the company said on its website.
"The distribution of OneCoins is limited to mining incentives, operating expenses and founding team incentives, not ICOs," the company added. However, in terms of mining and distribution, OneCoin is similar to digitally-encrypted currency bitcoin.
OneCoin does not constitute an ICO, nor a form of bitcoin, because it cannot be directly traded in cash and can only be obtained through one's own contribution and calculations within the system, the firm added.
"We don't want to play a financial game or issue money like a bank. We are engaged in the exploration of blockchain technology. OneCoins can only be used for the exchange of Xunlei products," ThePaper quoted Xunlei as saying.
Users can use OneCoin to buy internet speed accelerators and digital content, the official website shows.
OneCoin is not issued by a monetary authority, so it does not exhibit monetary attributes, such as legal obligations. It does not have a legal status equivalent to money, so it cannot and should not be circulated as a currency for market use.
Since China's regulators hold a relatively negative attitude towards virtual currency trading and ICOs, OneCoin may be subject to substantial regulatory risks if it is traded on third-party platforms and triggers secondary market circulation and value-added transactions, said Liu Xinyu, senior partner at Dacheng Law Offices.